Intel Corporation (NASDAQ: INTC) has made dramatic changes to its PC chips to bring them back to their former glory. The chip behemoth adopts this strategy with a heterogeneous architecture that mixes powerful cores with smaller efficiency cores to counter rival Advanced Micro Devices Inc (NASDAQ: AMD).
Intel is building its own foundry business to regain manufacturing leads from Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) and give its chips a competitive edge over chips made by AMD.
On Wednesday, the chip giant announced that its manufacturing division would now operate as a separate division. The business is expected to generate margins, but no exact timeline was given, resulting in a 5% drop in stock price.
Manufacturing services are an integral part of Intel’s turnaround plan.
As part of its turnaround strategy, Intel will provide manufacturing services to other companies, including competitors. Key external foundry customers will be announced later this year, and CFO David Zinsner confidently told an investor conference that the model could make Intel the second-largest foundry with manufacturing revenues exceeding $20 billion early next year at the earliest. . However, Summit Insights Group analyst Kinngai Chan noted that the forecast pales in comparison to Taiwan Semiconductor Manufacturing’s revenue, which is expected to reach $85 billion next year. This is a number that clearly shows TSM’s dominance. Chan concluded that Intel had only indicated that current manufacturing is small scale and may remain so for some time.
Big changes are coming with the Meteor Lake chips.
After years of manufacturing delays, setbacks and setbacks, Intel is set to launch 5 new process nodes over 4 years. Following in rival AMD’s footsteps, Intel is adopting a tile-based architecture. Meteor Lake CPUs feature unique tiles that can each be manufactured by a different process. The CPU tiles use an Intel 4, while the graphics and other features dedicated tiles are manufactured by TSM. Adopting a tile-based architecture allows Intel to mix and match manufacturing techniques. While this approach increases the complexity of the manufacturing process, it also reduces development time and costs as most advanced manufacturing techniques are not wasted on tiles that cannot benefit from being classified as cheap and outdated working methods.
This is AI era
With a tile-based architecture, Intel brings AI with Meteor Lake chips that come with dedicated AI processors called VPUs. Running a program like ChatGPT on a PC won’t be possible anytime soon due to its complex requirements, but many AI tasks could potentially come to a simplified device. Dedicated AI hardware also allows Intel to free up CPUs and GPUs, which can give users a boost in speed that users appreciate.
If Intel does it all, there are plenty of rewards waiting for you.
Collectively, all of the above changes have the potential to help Intel solidify its lead in the PC CPU market. Intel is taking risks and going all-in with new manufacturing processes, new architectural structures, new types of AI processors, and doing it all at the same time. But if it works, these moves will pay off big time. But AMD won’t stand still with its 92% stock surge so far as it gears up the AI chip game to catch up with Nvidia Corporation (NASDAQ: NVDA), which has tripled its share this year. Considering everyone wants a piece of the AI chip pie, the game will be intense to say the least.
Disclaimer: This content is provided for informational purposes only. It is not investment advice.
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This article Intel is going all-out to bring it back to its former chip glory. Originally published on Benzinga.com.
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